Spokane7
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October 11, 2010 in City
Spokane woman’s housing subsidy at risk after inheritance
Mother with disability sues housing agency after share of rent raised
Diana Harding, right, who is disabled and depends on Supplemental Security Income and a housing voucher, listens to attorney Cheryl Mitchell, left, Friday, Oct. 8, 2010 at Mitchell’s office.
(Full-size photo)
A disabled mother living on federal assistance could very well end up homeless after inheriting money from her father, who died last year.
The sum, $60,000, is not enough to sustain the 55-year-old north Spokane woman, but it is enough to cause her to lose the federal housing subsidy that allows her to live in a duplex apartment with her two teenage children.
“I can’t lose my housing,” said Diana Harding. “I have no other place to go.”
Harding is suing the Spokane Housing Authority, doing business as Northeast Washington Housing Solutions, which administers her Section 8 housing vouchers, over the public corporation’s interpretation of federal rules about how she uses her inheritance.
The housing authority says it is only following U.S. Department of Housing and Urban Development rules designed to protect federal aid from being abused.
Harding qualifies for Supplemental Security Income because of post-traumatic stress disorder resulting from abuse she has suffered.
In order to maintain her SSI benefits, as well as her eligibility for Medicaid, the state and federal health insurance for the poor, Harding’s Spokane attorney Cheryl Mitchell established for her a special-needs trust, which was approved in November by Superior Court Judge Michael Price.
Such trusts, widely used to protect disabled persons on governmental programs, are to be used to enhance the life of the beneficiary, but not to replace goods and services provided by Social Security and Medicaid.
The trust cannot be used for food, clothing or shelter. Some of the money from Harding’s trust has been distributed for such things as repair of her 18-year-old son’s car, a computer for her 17-year-old daughter and counseling for herself.
After paying her legal fees, trustee fees and other distributions on Harding’s behalf, about $30,000 remains in her trust.
However, the Housing Authority does not recognize the protections and counts every dollar distributed from it as income. Persons receiving Section 8 vouchers must spend 30 percent of their income on housing. The federal subsidy covers the rest.
In March, the housing authority advised Harding that her share of her $800 rent would increase from $122 to $438 a month and that if the trust distributions continued, she would lose her rental assistance entirely.
Mitchell challenged the decision and received an “informal review” by the housing authority. The hearing officer, Yvette Buckley, who supervises the employee who made the decision to increase Harding’s rent, upheld the decision. Outside of the courts, there is no further appeal.
Steve Cervantes, director of Northeast Washington Housing Solutions, says the housing authority has a responsibility to uphold the Code of Federal Regulations, which states, “Any income distributed from the trust fund shall be counted when determining annual income.”
However, housing and disability rights attorneys dispute this interpretation.
Thomas Beltran, a disability rights attorney in Los Angeles who specializes in special-needs trusts, says there are exceptions on “temporary, nonrecurring or sporadic income” distributed at the discretion of a trustee.
“If you can’t budget for it, it’s not countable,” Beltran said. “If Spokane Housing Authority wanted to interpret the rules in a way that didn’t impact her at all, they could.”
Further, the overarching duty of the states, he said, is to uphold the Olmstead decision in which the U.S. Supreme Court affirmed the right of individuals with disabilities to live in their community and not be institutionalized.
But housing authorities across the nation interpret income distributed from trusts like Harding’s in different ways, Beltran said.
Cervantes said his agency’s interpretation was upheld by the HUD office in Seattle.
“A one-time withdrawal could be an exception, but steady withdrawals to supplement living expenses must be counted,” Cervantes said. “We can’t make arbitrary exceptions.”
In June, Judge Price issued a temporary injunction barring the housing authority from raising Harding’s share of her rent until the court can decide her case.
Currently, there are 4,622 Spokane County households receiving Section 8 rental assistance, and there are 1,600 on a waiting list.
If Harding is terminated from the program, Mitchell said, it is possible she will never again receive housing assistance. She will not be able to afford fair market rent, and she will most likely become homeless.
“It’s punitive to say to a disabled person, ‘You’re disabled; you don’t deserve a better life,’“ Mitchell said, adding that her client has used her inheritance to help her children. “Do we want the children of the disabled to also be stuck not being able to better their lives?”
Rights panel poorly understood 
Shylock13 on October 11 at 5:04 p.m.
The Spokane Housing Authority is clearly made up of Republicans who want to cut government expenditures and privatize everything! The Tea Party wants “no exceptions” (read about them). Another no-brainer…if they Authority had, collectively, a brain!
dataxman on October 11 at 5:31 p.m.
So a person is living off the tax dollars of hard working Americans and she feels she should be able to spend money on extras and still continue to suck off the public teat? The entire $60,000 should have been seized by the Feds.
Start contributing to your (and your children’s) necessities (housing, food, etc) - you now have the means. Considering you have a positive net worth, you actually have more ‘means’ than the Feds…
tinberry on October 11 at 5:34 p.m.
I hope I am on this jury!
cpd805 on October 11 at 5:48 p.m.
Teddy, I actually feel dumber for having read your post.
Is it fair to have the withdrawls from the trust account counted as income? I don’t know, I’ll go ask one of the 1600 families on the waiting list and ask them if it is fair that she got $60K, but they have to wait on the list a little longer so she can keep her entitlement housing benefits.
Shylock13 on October 11 at 5:58 p.m.
She is disabled! But cpd805 raises an interesting question. Would those on the waiting list want someone ahead of them to become homeless so they could move up on the list????
cpd805 on October 11 at 6:14 p.m.
I think we need to remember that all our information is based on an S-R newspaper article. Everything needs to be taken with a grain of salt.
For instance, will she REALLY become “homeless” if she loses her housing assistance? Her attorney says so, but then again, that is her attorney saying so.
I don’t necessarily think anyone on the waiting list would wish her to become homeless so they could move up on the list. However, she was given $60K (about $30K left after paying her attorney…hmmm…and trust fees). If she loses her housing benefits, that is a LOT of rent money right there. I don’t think she would be standing on the corner holding a cardboard sign just yet.
force_vector on October 11 at 6:26 p.m.
Ok, fine, she’s disabled. The trust cannot be used for shelter. Got it. Section 8 says she has to spend 30% of her income on housing. She is spending her trust money on repairing cars, buying computers, and such. However, that is money spent and available that would have come from her section 8 allowed 70% slush fund anyway. Because she has it, it did not, and therefore has to be accounted for. Why is this so hard to understand? While she can’t spend it on housing, it lessens her burden of funding other “needs” and frees up money that would have otherwise been tied up with other requirements. In my book, that’s called income.
The first poster here wanted to take the partisan path that requires no thought. Clearly Theodore is more interested in running his mouth than he is using his brain. When Republicans try to hide income from being thought of as taxable they are berated by people like Theodore. But when it fits into an idealistic world created in an overly liberal mind, doing such things is quite ok apparently, However, did Theodore consider that perhaps this woman is a Republican? Who knows? And quite frankly, who cares? Chew on that for a little while, Ted.
dougfresh on October 11 at 6:48 p.m.
Couldn’t she just regulate her draws from the trust and make them small enough / spread over time so that she doesnt earn enough income to lose the assistance? It seems like this would be the logical route….
force_vector on October 11 at 6:58 p.m.
If the trust is there to draw from, how is if fair for the tax payers to subsidize her housing as though it wasn’t, simply because she drew in “small” amounts? How is pretending like you’re broke so others pay your way moral? How is that the right thing to do? “Hey man, can you pick up my lunch tab, I’m broke”. “Sweet! Thanks! Can we stop by Best Buy on the way back to the office, I want to get an ipad”? Huh?
Dazzeetrader11 on October 11 at 7:18 p.m.
Too bad this didn’t happen in January…she’d lose 55% right off the top with Obama’s inheritance tax ( the new one passed by the Dems). Does anyone honestly think this woman shoud be given complete public support AND be allowed a $60 K bonus? It’s a bit much to ask isn’t it?
Theodore…I see you “clearly” don’t know much. It’s the Dems who nuked this woman. See Obama run! See the Dems run!! Novemeber is nearly here and no sign of recovery for the Dems. Marr included. Obama and Murray should resign in disgrace. Murray voted for Obamas Inheritance tax! See how they run?
v3rn0nat0r on October 11 at 7:29 p.m.
I hope Mitchell is representing Harding pro bono in the case. Perhaps Harding didn’t take very good notes, but it seems like her lawyer didn’t do an adequate job of educating her on the ins and outs of her new special needs trust.
DPort on October 11 at 7:32 p.m.
Well, one idiot, Theodore J. Bear and other very good arguments. This isn’t about politics, “Republicans”, “Tea Party”, etc. Oh, I guess that is why though the liberals i The facts are, she now has spent half of her inheritance on legal fees. Nobody to do pro bono work if she has such a good case?
If I do my math correctly, her inheritance would last more than 11 years without interest towards her rent of $438. Her teenagers are 17 and 18 years old. Aren’t they old enough to get jobs to pay for some of their own expenses or are they waiting to qualify for Medicaid for themselves? I know my kids had at least summer jobs by the time they were 16. If this article was to garner sympathy for this woman, sorry, just made me angry!
zelda on October 11 at 8:01 p.m.
Well, on the plus side, this will keep poor people from playing the lottery. Who’s going to buy a ticket hoping to win just enough for this week’s cat food because if you get more you’ll wind up on the curb?
But seriously, this does raise interesting issues around the interpretation of financial-need thresholds. I hope this is a exceptional case and not something that can happen very often. Just goes to show you that wherever a line is drawn, there’s someone on the other side of it.
straighttalk on October 11 at 8:35 p.m.
She should be paying for her own housing with the $60 th. It is not fair to others who have no such asset for her to be at the government trough and they do without.
force_vector on October 11 at 8:41 p.m.
Neither $60k, nor lottery earning are small chunks of change (i.e “cat food” money). You only end up on the curb when you mismanage large sums of money, disabled or not. Bottom line: if you have money, the tax payers have a right to assume you’ll use it for your own welfare, rather than continuing to depend on them for it.
This article doesn’t raise any interesting issues of financial need thresholds whatsoever. Instead, it shows that some hold a hand that’s full behind their back with the empty one extended for more. $60k is plenty to get your life on track if you use it wisely. Especially when the subsidies are continued, albeit at a lesser amount, in spite of it.
gyrusx on October 11 at 8:44 p.m.
umm how can you have an attorney but not have enough money to pay rent??
$ 30,000 can pay over 3 years of rent in her current condo or 5 years at $500.
Entitlement infuriates me.
maria on October 11 at 9:41 p.m.
She could donate the money to the less fortunate and still keep her housing. I see no problem with that.
maria on October 11 at 9:43 p.m.
If she is on disability, she would have already paid into insurance from her past wages to cover her benefit now. It’s not theft of abuse in that case. You all may need it someday. What the hell do you think that deduction is for?
maria on October 11 at 9:46 p.m.
Then again, SSI is not the same as Disability. So she may have to give up the housing after all if she didn’t pay into Disability.
liz7315 on October 11 at 9:46 p.m.
This women needs to budget her money correctly and apply it to her needs. 60,000 can go a long way and her disability isnt physical its mental. She needs to get herself together and get her grown kids to pitch in. WOW people never cease to amaze me. So you wont be ab le to wear name brand clothes or go out to eat as often as you’ld like. Those are sacrafices you have to make when you are poor. Im sure on top of the housing subsidy she gets welfare of some sort.
maria on October 11 at 9:52 p.m.
Mental disability is cosidered the same as physical, liz. Your head is attached to your body. Derp.
maria on October 11 at 9:53 p.m.
considered
liz7315 on October 11 at 10:24 p.m.
Ummm who are you insulting? Yes it is a disibility but not one that with proper treatment could be resolved. Ya derp! But I assume your probly just like her collecting benefits from hard working taxpayers so that you can live comfortably right?
Scoutster on October 11 at 10:57 p.m.
The problem is she CANNOT spend the money on rent.
With a special needs trust she is forbidden to spend it on necessities.
Yup. It’s dumb. But that’s how it works.
The point is this woman is caught between two competing policy positions: 1)People receiving subsidized housing HAVE to be cash poor and 2) People with cash don’t need subsidized housing.
Yes, the sensible thing would be to allow her to apply the funds to current and future rent. She can’t.
dataxman on October 12 at 5:52 a.m.
Scoutster - if she can’t apply the cash from the special needs trust on rent, whose fault is that? Her attorney set up the trust. If the attorney did not understand the repercussions of this decision, then the attorney needs to make it right.
cpd805 on October 12 at 8:47 a.m.
Scout,
She CAN apply the money to housing. She can pull it out of the trust (never should have been there anyway), get off housing, and use the money for rent. The $60K would have been YEARS of subsidy free rent. That would have been better for everyone. Better for her because she would have the satisfaction of pulling her own weight, better for us because we would not be subsidizing her rent, better for her kids who need an example in self-sufficiency.
Instead, they looked for a way to have her cake and eat it too. Well, half the cake, the lawyer probable took half of that.
hollistonhouse on October 12 at 9:09 a.m.
I see this like most of those commenting, cpd805 has it right too. Her $60K could buy housing that that puts her in a payment she can afford. Her children should be able to carry some weight and find part time work. They will out grow her soon. She can show them how to be survivors instead of victims. I raised a daughter on minimum wages without the help of taxpayers. That attorney did her an injustice. She needs to move over and let someone who is truly needy (without the asset) on the waiting list have a chance at subsidized housing. We have created a society of victims who wouldn’t recognize a blessing when they see one. They do want the cake and eat it too!
Scoutster on October 12 at 9:09 a.m.
No, it is a federally regulated trust and she has very little discretion on how it is used.
You might like to just look at her a sponge collecting money on the dole, but sometimes things are more complicated than the appear.
Dig a little deeper.
cpd805 on October 12 at 2:02 p.m.
A federally regulated trust that gives her little discretion on how it is used…… AS LONG AS SHE STAYS ON HOUSING.
She could decide to pull it all out, but would have to pay her own rent for a while…..and it would be enough to pay for YEARS.
That is the problem with becoming dependent on the government for sustinance. We never consider the alternative of not using it.
liz7315 on October 16 at 5:35 p.m.
If she has this money she should have thought of a better way to invest it instead of a stupid trust her lawyers helped her set up to circumvent having to pay her own rent. I am a single mother who pays 650 in rent with out the help of housing and I make minimum wage. She needs to tell her kids to get a job and she herself needs to do whatever is possible to get herself independent.